European Central Bank Banking Supervision has imposed two administrative penalties totalling EUR 12.18 million on J.P. Morgan SE for incorrectly reporting risk-weighted assets (RWAs), resulting in misstated capital requirements and capital ratios. Between 2019 and 2024, the bank understated RWAs by misclassifying corporate exposures for 15 consecutive quarters and applying a lower credit risk weight than prescribed. It also excluded certain transactions when calculating RWAs for credit valuation adjustment risk for 21 consecutive quarters. The ECB found both breaches were committed with serious negligence linked to deficiencies in internal processes and controls, and classified the credit risk breach as “severe” and the credit valuation adjustment risk breach as “moderately severe” under its penalty methodology. J.P. Morgan SE may challenge the ECB’s decision before the Court of Justice of the European Union.
European Central Bank - Banking Supervision 2026-02-19
European Central Bank sanctions J.P. Morgan SE EUR 12.18 million for misreporting risk-weighted assets
The European Central Bank Banking Supervision fined J.P. Morgan SE EUR 12.18 million for incorrectly reporting risk-weighted assets, leading to misstated capital requirements and ratios. The bank misclassified corporate exposures, applied incorrect credit risk weights over 15 quarters, and excluded certain transactions in credit valuation adjustment risk calculations over 21 quarters. The breaches, linked to serious negligence in internal processes, are classified as "severe" and "moderately severe." J.P. Morgan SE may appeal the decision.